Dollar Crashed Below 80.00 What Is Next For Gold, Copper And Lithium? TNR.v MUX ILC.v GDX

CS. In a few words: they all are going much higher now. Let's discuss why we think it is going to be the case. This week we had the very important move in the US Dollar:

"Initially US Dollar went up on the escalation of the situation in Ukraine - as any potential military action in the world is supposed to be positive for the U.S. Military Complex, but on Friday with major headlines from Moscow about Ukraine Dollar has dived decisively below 80.00 to the 79.78 close.After these U.S. actions in Ukraine considered as an insult by the Kremlin the least you can expect is selling of the US Treasuries by Russia and, maybe, already accelerating of selling by China as well . They have been already smelling the rat about the USTs Game Of Musical Chairs for a long time. It is just too personal. None of these two countries - or it will be better say leaders - would like to be liberated next in any circumstances."

 What is coming next for stocks and commodities? The concept of Great Inflation in 2014 was first introduced here by Toby Connor article and so far the market was unfolding as he has predicted. The most important observation here is that not only we are seeing the first signs of increased money velocity and unfolding Inflation in the different Commodities Breakouts, but that FED is actively looking forward to create Inflation. Janet Yellen statements about desired level of Inflation were quite a revelation for the Central Banker to say the least. Never fight the FED and with the help of Russia and China US dollar will slide down even more and Inflation will be coming not only onto your grocery bills, where it was never gone, but even into the massaged government statistic reports.

Toby Connor: Dollar Breaks Down, Great Inflation to Push Gold And Silver Much Higher TNR.v MUX GDX GLD SLV

Toby Connor: The Great Inflation Of 2014 - Gold And Silver To Rise TNR.v, MUX, GDX, GLD, SLV

"Toby Connor provides very interesting technical view on the general markets, Commodities, Gold and Silver. Nobody can find inflation these days and his take on the final rise and bust in the general markets is very intriguing. Our own observations confirm the CRB - Commodities Index breakout and that Gold is knocking on the $1270 with huge break out to the upside after that. Supply and Demand picture provides further support to the technical observations in Gold and Silver markets these days. Where the Gold will come from in the future with China record buying continued? M&A activity will be driving the next Bull market in Gold and Silver miners."

  Today we would like to share very interesting conversation from Jim Puplava's Financial Sense:

"Erik Townsend and Chris Puplava co-host this week in a special edition of the Big Picture. The first topic is “When will Janet Blink?”, refers to new Fed Chair Janet Yellen, and if she will stay the course in taking the Fed’s tapering program back to zero stimulus. Erik contends that it’s impossible to trade or invest using conventional wisdom in this environment, and only elite insiders know in advance what to expect from the Fed."

  They are discussing at depth the very similar scenario presented by Toby Connor: when weak US Dollar will actually push Equity markets even higher as it happens in the first stages of Inflation environment. Once the first signs of Inflation will make its way into the official statistic equities will provide the certain level of protection of wealth as "they own the real assets". Here we will not digress to discuss the real assets behind WhatsApp 19 Billion valuation by Facebook.

  Commodities will be the major beneficiaries of this trend. On the CRB chart below you can see the huge breakout by Commodities from the down trend:

  Commodities have created the very big consolidation base with Double Bottom Reversal with Lows in Summer of 2012 and in the late Fall of 2014. The Second Low in November 2014 was confirmed by retest in December 2014 and very strong breakout after that. All enormous liquidity created by QE on the world-wide scale is finally sipping into the real world and pushing the commodities prices Up.

  Gold and Silver were one of the first to benefit and we have seen the very important confirmation by the Gold and Silver Stocks, but even more important is the unprecedented demand from China for Gold now.

Gold And Silver Break Crucial Levels Causing Massive Short Squeeze TNR.v MUX GDX GLD SLV RGLD SWC

Frank Holmes: These Gold Charts Will Make Your Heart Beat Faster TNR.v MUX GDX GLD ABX GG RGLD

  "Frank Holmes presents a very interesting set of charts supporting the bullish case for Gold and Gold stocks. Now with Gold crossing 200MA we have the game changer for the Gold marker. Professional traders have positioned themselves after 20MA was breaking out to the upside and smart money has followed after 50MA. Now the retail public will start buying the new Gold Bull leg.

  Number of Gold stocks with, McEwen Mining among them, has printed The Golden Cross already, when 50MA is crossing 200MA to the upside, confirming the bullish reversal pattern. It is very bullish set up and we expect the rally in Gold stocks to widen its base to include the smaller junior miners."

Hedgehog Trader ‏@HedgehogTrader  Feb 7

TNR Gold TNR.V is one of the most intriguing microcap stories I follow. #insidersbuying cc: @Sufiy @TedDixon @inkresearch

TNR Gold Insiders report: CEO And CFO Buying Shares. 

 Another very important confirmation is when insiders are buying into their own companies like in case with TNR Gold.

  GDX Gold Miners ETF has a very strong breakout from the December 2013 Low above MA50 and sitting right on that level retesting it now. All momentum indicators are still in positive territory. Gold and Silver price will be the major drivers here with the Catalyst for particular stock with the new discoveries and M&A activity.

  Copper should be the major beneficiary of the rising Inflation tide. 

  Sector was very volatile recently, but the emerging upside trend argument can be already made here as well. It must be confirmed by further strength and breaking out above the MA50. The most important confirmation of the rising Copper prices to come, as Glencore is talking about, is industry insiders M&A activity:

Rumour Mill: "CITIC Buying Into Pascua Lama" - Can Argentina Mining Really Make Its Come Back? TNR.v MUX ABX LCC.v

 "After the bidding war for Las Bambas Copper in Peru there are not so many world class copper assets left. M&A activity in Copper sector is heating up with ongoing deals on Glencore's Las Bambas, Hudbay's acquisition and OZ Minerals talks with potential partners. Now the projects like Los Azules copper will get more industry attention. We are following McEwen Mining and TNR Gold involved in this project, please read carefully all our disclaimers and do your own DD, as usual."

 Lithium sector has finally its come back now in style on the back of Tesla Gigafactory news:

  Lithium ETF has a definite breakout to the upside and Buy Volume signal and Lithium Stocks had an explosive move this week from very depressed valuations. After the initial excitement time is to make your homework and separate the future winners and the wannabes by your own DD. LG Chem is already chasing Tesla with its own plans announced today to build a Lithium Battery factory in China. One thing is for certain: Battery Industry insiders are building new production facilities as they see the coming demand - it will require new secure sources of Lithium. We will have to learn the new names like world leading Integrated Professional Lithium Producer Ganfeng Lithium and its partner International Lithium from Canada with Lithium projects in Ireland, Canada And Argentina.

Lithium Stocks Surging On $5B Tesla Gigafactory Plan To Ramp Up Mass-market Electric Car ILC.v TNR.v LIT WLC.to

  Now we have more details on Tesla Gigafactory and Elon Musk's plans  to produce Lithium Batteries on a mass scale and dramatically reduce the cost. This plan brings catalyst to the whole electric cars and energy storage industry. As we have discussed before, Lithium materials industry is getting the boost as well. Investors are taking notice and Western Lithium is already up 300% this year. Rodinia Lithium and International Lithium are getting the bids now as well. After the initial hype in the Lithium sector the main question was when the mass market for electric cars will be coming to life. Now we have this answer and access to the capital will define the new winners among Lithium Juniors. International Lithium with its strategic partner Ganfeng Lithium from China, one of the top Lithium Materials producers in the world, are getting ready for the surge in demand advancing Lithium projects in Ireland, Canada and Argentina.

International Lithium Strategic Partner Ganfeng Lithium Presentation ILC.v TNR.v LIT TSLA

  Tesla Gigafactory is driving a lot of interest to the Lithium sector these days. Lithium stocks were surging this week and it is time to find out who is who in this investment mega trend and separate the wannabes from serious players with projects, technicals teams and, the most important here, strong strategic partners available to provide capital and expertise to develop those projects. If this strategic partner, like in the case with International Lithium and Ganfeng Lithium from China,  happen to be one of the leaders among Integrated Professional Lithium Producers in the world it should deserve your attention. Do your own DD and always kick the tires - we will provide you with the initial information.

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Toby Connor: Gold - The Hidden Agenda Behind The Bear Raid.

  

  You will appreciate analysis by Toby Connor more when you realise that this article was posted on Monday August 12th, just before the big move in Gold was confirmed this week. We like his concept of the Megaphone Top in US dollar and are watching closely the unfolding of that technical situation now.

Currency Markets: The Next Crisis Has Begun

"We would like to share with you today very interesting observations from the currency markets by Toby Connor. Recent volatility in the currency market was exceptional, particularly, when you consider that equity market was moving almost always in one direction - Up. Equity market volatility is at the record low and it looks like the real action now is in the US Dollar camp. Gold will follow this development fuelled by physical shortage as well.

  This concept of "Megaphone Top" in US Dollar is very interesting and we have seen its brutal Bearish resolution in 2008 in equity markets before."

James Dines - Gold, Silver & A New Super-Major Bull Market

"James Dines talks about new Super-Major Bull Markets in the making, which are still invisible for the crowds. He praises Tesla Motors with its disruption of auto-market and 3D printing technology. We think that our ideas about Lithium will fit nicely in this trend.

  Original Gold Bug has recently reinstated his Buy Call on Gold. His observations are correlating nicely with the technical picture provided by Adam Hamilton in his latest piece:

Adam Hamilton: Gold and GLD Exodus Reversal MUX, TNR.v

"Adam Hamilton provides now a very compelling case for the General Equity Markets and GLD relationships and correlations and if you do not think that trees can grow straight up to the sky we are at the historical point in the markets development in the age of FED central planning now."

Gold Scents:

MONDAY, AUGUST 12, 2013

GOLD: THE HIDDEN AGENDA BEHIND THE BEAR RAID

First off let's go over the key cyclical points from today's action. Today gold broke above the cycle downtrend line, thus confirming August 7 as a daily cycle low.

Again I expect some short-term profit taking once gold reaches the previous high of $1348. This is the most likely resistance level for day traders and short-term traders to take profits. It's also the level that should deliver the most bangs for the buck for options expiration manipulation to begin. So I continue to think we are going to see some kind of minor pullback between now and Friday. 

At this point I don't believe this pullback is going to succeed in pushing gold below $1300. This is going to be a "buying opportunity". It's going to be a tough opportunity to seize because it's going to appear like the bears are back in control of the market. But as I will explain later, I think it will just be one of many short-term manipulation events to allow big-money high-volume entries into the gold market.

For those of you waiting for a breach of $1425 before re-entering, the confirmed daily cycle low has now revealed a lower price threshold. Gold no longer has to move above $1425 in order to make a higher high. Now it only has to move above the recent daily cycle top at $1348 to initiate a new pattern of higher highs and higher lows.

That being said, you don't have to wait for gold to move above $1348. Now that we have a confirmed daily cycle low on August 7th you can enter full positions at any time with a hard stop below the August 7th intra-day low of $1272. If that level is breached it would signal that the daily cycle has failed and the intermediate cycle has rolled over and is again in decline.

Now I want to discuss what I believe was the motivation for the bear raid that the metals have undergone over the last eight months.

At first I thought it was solely about pushing physical gold back into the market, and to move that physical gold from west to east. Let's face it, anyone with half a brain understands that global QE is going to end badly, and countries are going to need physical supplies of gold to eventually back their currencies. I'm absolutely sure that Germany, China, and Russia understand what is coming. So I think the initial manipulation after the QE4 announcement was mostly about driving physical gold back into the market.

In the chart below I have indicated the highly unlikely series of events that followed Bernanke's QE 4 announcement at the December FOMC meeting. To start with gold was driven back below the key psychological $1700 level during an unnaturally high volume hit in the middle of the night. No normal trader seeking to maximize returns would dump that kind of volume into the thin overnight market.

Equally strange was the intense selling pressure that would emerge any time gold approached that $1700 level over the next two months. The fact that the dollar was moving down into an intermediate bottom during this period makes it even more unlikely this was a natural move.

The next event, and a personal highlight, was Goldman Sachs coming out with a public recommendation to sell gold short the day before the stops were run below $1520. Since when has Goldman Sachs ever been interested in making the public money? It seems much more likely that Goldman Sachs traders were already short the gold market and were looking to juice the downside as they already knew a stop run was coming.

Again the hit came with a massive futures dump, the equivalent of 500 tons of gold in the thin premarket trading where it would have the most damaging effect.

Then in late May and early June it was called to my attention that unusually large positions were being accumulated in GDX June expiration puts. At this point it wasn't surprising that gold was repeatedly prevented from closing and holding above $1400, and miraculously by the June expiration gold had collapsed by another $125 sending all of those puts deep into the money. Coincidence? I hardly think so.

Now let's assume that I'm not the only one that understands that global QE is going to have serious consequences down the road, and that those consequences are going to drive, at the very least, another large leg up in the secular gold bull market, if not the bubble phase. Let's also assume that there are at least a few traders that are not only blessed with common sense, but also with the means to temporarily influence market direction, especially in thinly traded markets like gold and silver (I suspect it's considerably more than a few, and I think we can be pretty confident in assuming that most of the big banks are included in this group).

So for the moment let's just assume that the last freely traded intermediate cycle low (bottomed in November) had been allowed to function as the springboard for what should have been another normal C-wave advance as QE ∞ got underway. Based on what transpired during the last C-wave, we would probably have seen gold rally over the next two years to somewhere around $3000-$3200. Roughly a 100% gain from the October low of $1675.

But let's assume that we aren't the only ones that recognize QE ∞ is going to eventually drive another huge leg up in the secular gold bull. Let's also assume that these big players have the means to create a bear raid in the sector and push price to artificially lower levels.

Assuming that the eventual end game is that same $3200, look what a bear raid does to one's profit potential if you know the raid is coming, and can enter close to the bottom. Instead of a 100% gain you are now looking at a 200% gain. And that's not including any profits one might make by participating in the raid on the short side.

Next, look at the massively increased profit potential that has been generated in the mining sector by this same bear raid.

I think we can expect continued small manipulations from time to time to manufacture minor sell offs and artificial daily cycle bottoms, similar to what happened last week with the Tuesday take down that stretched the daily cycle and temporarily drove gold back below $1300.

In fact I think we are probably going to experience some kind of manipulation this week as we move towards options expiration. But from now on I think these will just be brief to tangle cycle counts, or run short term stops, and allow big money insiders slightly better entries. The major manipulation is complete. It has accomplished its goal.

In my opinion, the last eight months had nothing to do with the Fed trying to suppress the price of gold, and only a little bit to do with moving physical metal from west to east. 

As usual, this was mostly about big-money insiders manipulating the market to generate maximum profit potential during the next leg of the secular bull market (which in my opinion will probably turn out to be the bubble phase of the bull market). They've managed to lower the starting point considerably below the natural bottom in October of $1675. The bear raid has massively increased the upside percentage potential during the next leg of the bull market, along with generating some pretty decent short side gains as they set up what I expect will be the trade of the decade."

  

  We would like to share with you today very interesting observations from the currency markets by Toby Connor. Recent volatility in the currency market was exceptional, particularly, when you consider that equity market was moving almost always in one direction - Up. Equity market volatility is at the record low and it looks like the real action now is in the US Dollar camp. Gold will follow this development fuelled by physical shortage as well.

  This concept of "Megaphone Top" in US Dollar is very interesting and we have seen its brutal Bearish resolution in 2008 in equity markets before.

Rick Rule On Gold & Resources: "The Stage Is Set For An Absolutely Dramatic Recovery" TNR.v, MUX

"To make this dramatic and pleasant for Survivors picture come true we need just one thing - Pros with the money coming into the market, without them it will always be only the wishful thinking. We can see them coming now."

Kitco:

Currency Markets: The Next Crisis Has Begun

Today the dollar broke through 80.40. This is a major development as it signals that the current daily cycle topped in only 2 days, thus confirming that the intermediate cycle has also topped.

I've been warning for months and months that this was coming. Anyone with a modicum of common sense knew that printing trillions of dollars was going to eventually have consequences. There is no escaping the inevitable; if you aggressively debase your currency eventually you are going to have a currency crisis. The first one has now begun.

Over the next 3-4 months the dollar is going to test the lower trend line of the megaphone topping pattern and ultimately break through. When it does we are going to witness a spectacular collapse in the dollar, probably testing the 2011 bottom by the next intermediate cycle low due in November.

This is going to cause all kinds of problems. We are already seeing the bond market breaking free of Fed manipulation. This will only get worse as bonds recognize the severity of the crisis ahead. Ironically the Fed is going to print harder and faster to try and tame the bond market. It will have the reverse effect. It will just accelerate the dollar collapse which, in turn, will intensify the selling in bonds.

This has already pricked the echo bubble in housing. In the chart below we see the same megaphone topping pattern in play as in the dollar index.

Smart money has known for months this was coming. I strongly suspect the manipulation in gold over the last 8 months was done to transfer physical metal from weak hands into strong hands in preparation for this event. Now it's time for gold to do its job of protecting wealth during a currency crisis. I told subscribers last night that we will see a war over the next several days and weeks as gold breaks free of the manipulation and gets busy discounting the coming currency crisis.

The intervention is going to try hard to keep gold prices down, but ultimately gold is going to win and break free of the artificially low prices. Ultimately gold is going to protect wealth during an inflationary period of time, just as it always does. And ultimately all the manipulation will succeed in doing is to cause price to rise much further and faster than would have occurred if gold had been allowed to trade freely.

Batten down the hatches - the next Fed created catastrophe has already begun.

By Toby Connor
GoldScents
www.goldscents.blogspot.com"